A Free-Market Energy Blog

Why Is Clean, Cheap, Conventional Energy a Hard Sell? (Part 1)

By Wayne Lusvardi and Charles Warren -- June 5, 2014

“Capitalism, as an institutional arrangement, has been singularly devoid of plausible myths; by contrast, socialism, its major alternative under modern conditions, has been singularly blessed with myth-generating potency. No theory of capitalism can bypass this, so to speak, mythological inequality between the two modern systems of socioeconomic organization.”

Why is it so difficult for cheaper, cleaner electricity— from nuclear and hydroelectric power, to cheap, lower-polluting natural gas-fired power—to compete in the ideological culture wars against crony-capitalist, semi-socialized renewable energy?

We would offer that one of the most helpful frameworks for answering this question comes from one the most unlikely of disciplines: sociology. Sociology in general is, accurately, perceived as antagonistic to rational economic electricity. But we are here referring to Peter L. Berger’s sociology of economic systems, not the Marxians’ sociology of economics.

Many readers will mistake the word “sociology” as being synonymous with the word “social” (as opposed to “market”) or even with “socialism.” Yet Berger is an apologist for capitalism on empirical grounds, because of its “economic culture.”

To Berger, any opposition to the irrational forces at work in the energy industry must first recognize that capitalistic economic rationalism lacks those all-powerful myths—such as combatting global warming—that the irrational forces within the renewable energy industry provide so plentifully. Although Berger never specifically writes about catastrophic global warming, he alludes to the compelling power of such myths in his book The Capitalist Revolution:

Capitalism, as an institutional arrangement, has been singularly devoid of plausible myths; by contrast, socialism, its major alternative under modern conditions, has been singularly blessed with myth-generating potency. No theory of capitalism can bypass this, so to speak, mythological inequality between the two modern systems of socioeconomic organization. [Note: Berger’s book can be found online here]

The Earth Liberation Front

One is reminded of the extreme environmentalism of the Caltech PhD candidate in physics William Cottrell and his Earth Liberation Front cell. In 2003, Cottrell’s ELF cell firebombed and vandalized 130 Sport Utility Vehicles (SUVs) at auto dealerships, claiming they would contribute to catastrophic global warming.

When Cottrell was caught, convicted, and imprisoned, it brought about a “Free Billy Cottrell” organization, notably supported by physicist Steven Hawking. Local media portrayed Cottrell as a victim, even in the community where businesses were firebombed. A documentary film on Cottrell, “Standard Deviation”, was produced in 2008 and won an Emmy Award for the best student documentary in 2009. The liberal U.S. Ninth Circuit Court of Appeals overturned Cottrell’s convictions for arson in 2009, and Cottrell was eventually released from prison in 2011.

No business-school graduate student and no organization for the advancement of energy markets could ever motivate or captivate such extremism. Nor would Hollywood produce any movies making heroes of free-market electricity advocates for destroying property. (Of course, free-market advocates would be very unlikely to destroy property.) Neither would courts likely overturn convictions for such serious crimes, on flimsy psychological grounds, if committed by business school students or stock market traders.

The reason that socialists are treated differently from capitalists lies in what Berger calls legitimation. What holds society together, he says, are not solely economic interests, practical needs, or technology but “beliefs that explain and justify its particular institutional arrangements. Thus, a legitimation is any answer, on whatever level of sophistication, to the question as to whether this or that institutional arrangement is morally just or proper.” Legitimation is particularly needed when society is in a crisis or when sacrifice is required, as in war. But it also arises when society is confronted with such questions as: Should we excuse vandalism on behalf of fighting global warming? And: Should we excuse economic irrationality on behalf of fighting global warming?

Modern capitalism was originally legitimated by Protestant Christianity, as famously described in sociologist Max Weber’s book “The Protestant Ethic and the Spirit of Capitalism” (found online here). But today’s rational economic capitalism is averse to all such mythic legitimation. Rational Capitalism, Berger claims, is grounded solely in its productivity as an economic system, and thus cannot inspire devotion to the economic principles it comprises. By contrast, Socialism is a quasi-religious belief system about history and world society that fervently embraces myth and so transcends economics.

Green Energy’s Horizon Effect

The consequences are easy to see. Capitalism has dramatically raised living standards and improved environmental conditions everywhere it has been tried. Socialism, by contrast, has a history of repeated failures. The contest between them should be no contest. Yet socialism is winning. How can that be?

Failure has never deterred socialism, because its myths convince people that its success always lies just ahead, on the horizon. Read such science and energy websites as Physorg.com and TheEnergyCollective.com, and you will find continual reports of purported breakthroughs in renewable energy technologies—50 percent greater efficiency for solar panels or new battery technologies that can power cars for 500 miles on a single one-minute charge.

Of course, none of these “breakthroughs” ever reaches the market. But no matter. As Peter Berger says, Socialism’s never-ending quest for utopia is part of its allure:

It is possible that the root cause of the mythic superiority of socialism is the fact that, or so it appears, its realization never takes place. It is a fugitive vision, tantalizing those who adhere to it from one near miss to another. But Tantalus goes on trying – and believing. Thus there is the unending quest for the first case of “True Socialism,” always just out of reach, the quest taken up again after each disappointment. There is no capitalist equivalent of this (profoundly mythological, indeed religious) quest. The benefits of capitalism ARE attainable.

Thus, from-the-center energy planners are able to go on promoting a future energy utopia, if only we will subsidize the necessary research-and-development, namely, a return to pre-industrial forms of energy made more efficient by modern technology (humongous wind turbine blades, giant solar magnifying glasses, biomass wood burning power plants, ethanol fuel made from corn, solar desalting plants, etc.).

The result of opposing conventional energy is therefore a win-win-win for socialism. For techno-socialists, there is the mythic grandeur of holding out for the impossible dream of energy utopia. For eco-socialists, there is the mythic holiness of lowering living standards and going back to an ascetic, simple lifestyle in a bucolic green landscape guided by a conservation ethic. And for crony capitalists, it just so happens, a first step in the right direction (in either the techno- or eco- direction, they will assure you) is the use of highly subsidized “renewables” that foist higher electricity prices on everyone else.

Given the inherent mythological handicap of market electricity in offering an appealing vision, despite its undeniable contributions to human welfare, what can those in the conventional energy industry do? Part 2 of this series will discuss what can be done to overcome the powerful mythic pull of postmodern, central planning in the electricity industry and in society.

9 Comments

“Thus, a legitimation is any answer, on whatever level of sophistication, to the question as to whether this or that institutional arrangement is morally just or proper.” Legitimation is particularly needed when society is in a crisis or when sacrifice is required, as in war.” Seems to me that is precisely when rationality is MOST important, not least. We’ve seen the results of ‘legitimation’ (nee emotionalism) enough already. Calm beats imposed chaos any day, and there’s a reason Chicken Little is famous.i

Agreed that rationality is important but probably not persuasive to those with a Socialist worldview. Appeals to rationality won’t work in energy culture wars with the true believers of sustainably energy (itself a myth). Rationality became historically institutionalized with Capitalism (efficiency, time clocks, productivity measurements, profit margins) and deinstitutionalized with Socialism. Socialism has a “rationale” but its appeal is religious like.

Take a look at Pulitzer Price winning book by Dan Fagin “Toms River: A Story of Science and Salvation” and the quasi-religious appeal it has.

An earlier version of the above article included a joke, which was too long and potentially confusing to include. It goes something like this:

In California, the takeover of rational electric monopolies by economically irrational green energy buying cooperatives, rooftop solar distributed electricity and centralized solar farms in the Mojave Desert, is slowly putting the regulated monopoly utilities out of business. The CEO’s of each of the big three electricity utility monopolies –- Peg, Ed, and Sedgwick – (nicknames for PG&E, So Cal Edison, and SDG&E) each draw straws to see which of them should commit suicide so that the remaining utility can avail itself of a limited amount of stranded asset funds and pool remaining customers into one dinosaur regulated electric utility. Ed and Sedgewick lose. But Ed heroically volunteers to go first.

After bidding a tearful farewell to everyone, Ed takes the elevator up to the top floor of the California Public Utility Commission headquarters. As he falls, he looks into the windows of the boardroom at the Schadenfreude smiling faces of the managers of each of the new Community Choice Aggregators that are putting him out of business.

Peg is looking through her energy-efficient window watching her fellow CEO fall. And as Ed goes by, she urgently tries to shout out through the glass windowpane one last bit of advice that comes too late: “Ed, wait, black start San Onofre!”

(“black start” means re-starting a power station from small auxiliary power generators or from outside sources).

(of course Ed couldn’t hear Peg shout to him because she was absurdly and comically trying to shout through an energy tight window as required under Title 24 Building Energy regulations in California)

San Onofre is the name of the now-closed nuclear power plant in California that produced totally clean energy at about 3 cents per kilowatt hour.

The joke lies in the absurdity and implausibility of committing suicide in order to save a monopoly electric utility from being taken over by a new Community Choice energy-buying cooperative. Rational electricity does not have the same compelling power to motivate people, such as Caltech scientist William Cottrell, to extremist actions such as firebombing SUV’s to save the planet. CEO’s of monopoly utilities are not about to commit suicide because a part of their business is being taken over by energy cooperatives while even rational scientifically trained scientists such as William Cottrell are compelled to do illegal acts to symbolically save mankind.

I think we have to remember that rationality is socially located. Ever see a college liberal arts major who takes extension education in some occupation afterward requiring mathematical skills? They gradually are resocializaed to the importance of knowing how finance, or accounting, or real estate, or running a small business works. Those in the Knowledge Class of education, journalism, activism, social work, nursing, environmentalism, etc. aren’t necessarily irrational but lack the mental rationality required in other occupations that are part of the business world. Those in the Business Class are more prone to respond to rational and logical argument; those in the Knowledge class to emotional appeals. Of course this is a generalization, but it has an empirical basis. Some people may buy a home on impulse and emotion; others on comparable sale prices and price per square foot in certain neighborhoods. What makes people modern is rationality; counter-modern people are counter-rational as well. They may fall for leasing or installing a rooftop solar system that doesn’t pay for itself without taking large subsidies from others but will provide them with almost free electricity at the expense of others who have to pay for it. But the homeowner with rooftop solar system will feel morally superior.

“I have got materials toward a treatise proving the falsity of that definition [of Man as] animal rationale, and to show it should be only rationis capax. Upon this great foundation of misanthropy… the whole building of my Travels is erected; ”

Man is only capable on occasion of acting rationally was Swift’s view. Most people caught up in social movements to save the world from whatever environmental calamity can be prophesied are typically not “animale rationale.”

The most telling part of this article is where the authors hasten to differentiate the terms ‘sociologist’, and ‘socialist’ because they’re worried that their readers might confuse the two. It serves both to achieve that important aim, and to let the rest of us know that we have stumbled into the strange and self-contained world of right wing self-pity.

Ayn Rand had it right on that statists of every stripe rely on a denial of reality and a belief in either or both the ‘mystics of muscle’ or ‘mystics of spirit’. And the fact that it still goes on today tells me there is no hope for the human race.